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So, when we see a brand-name stock leap to the top of the leader-board, it's always interesting. The online entertainment company has been playing extreme yo-yo with shareholders of late.

On October 23rd, NFLX management disappointed Wall Street by guiding sales and earnings lower. As you can image, the revision was greeted rudely as Netflix shares tumbled downhill from $68.22 to $60.12 from close-to-close.

Then a Knight named Icahn rode in one his horse named Franklin and news broke that the famous investor bought 10% of Netflix. Since entering the scene, the NASDAQ 100 member snapped the price string back, climbing from $61.51 to more than $76 as we type.

Ichan told Bloomberg TV there is an obvious, secular change in the way people consume entertainment. Anecdotally, the famed investor says he is a movie buff, but not even he goes to the theater as frequently. In the past, Netflix was limited with by the quality of online viewing. That's changed before our eyes, he says with Smart TVs and the iPad.

Ichan believes it is "almost obvious" that Netflix should be consolidated with the likes of Google (GOOG), Amazon (AMZN), and Verizon (VZ) making a ton of sense as potential suitors. Critics keep pointing to NFLX competitors like redbox and Amazon entering into the space; however, Netflix's $2.5 billion in cash flow, from North America alone, allows NFLX to produce shows that the likes of Google or Microsoft (MSFT) may not be interested in developing. Meanwhile, HBO and Showtime are roped in by their cable contracts. It's this flexibility that separates NFLX from the others according to Ichan.

This morning, Netflix adopted a "poison pill" to separate itself from Ichan, or at least prevent him from taking a larger position. The company adopted a shareholder's rights plan "intended to protect Netflix and its stockholders from efforts to obtain control of Netflix that the Board of Directors determines are not in the best interests of Netflix and its stockholders, and to enable all stockholders to realize the long-term value of their investment in Netflix. "

iStock agrees that Netflix's subscription model and changing viewer habits do favor the company. We also agree with Ichan that a secular change is obvious. If a GOOG or MSFT decides to take-out NFLX, we think there is room for a premium to be paid. With a market cap of $4.28B and annual sales of $3.54B, 1.5 times sales would give the company a market cap of $5.31 billion, or a 24% premium over today's price.

The fragmenting of viewership habits, from TVs to tablets and smartphones, should help grow subscribers for Netflix longer-term, especially if they create compelling, original content like Dexter or Boardwalk Empire. Content is to iPads and iPhones what razor blades are to razors, delivery is important, but content is king.

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